Australian recruitment firm Ignite (IGN:ASX) reported revenue increased by 4.8% in the six months ended 31 December 2021 to AUD 59.4 million (USD 42.59 million).

At the same time, gross profit increased by 3.6%. The increases in revenue and gross profit were primarily due to a rebound in the demand for permanent recruitment from the prior year’s Covid-19 low as well as an increase in the number of contingent labour contractors.

The lower gross profit increase relative to the revenue increase was due to the revenue mix with a lower contribution from the high margin On Demand IT Services and Talent Solutions businesses relative to the prior comparative period.

“We are pleased to report the continued improved performance of the group as demonstrated by back- to-back quarters of gross profit growth in the first half of the financial year,” the group stated. “The executive team is focused on profitable growth whilst also investing in new headcount and enhancements to the delivery of our services.”

“The greatly reduced statutory operating loss of AUD 80k (USD 57k), which includes AUD 118k (USD 84k) of non-recurring strategic investment and other costs that are unlikely to impact the business moving forward, is a significant improvement on the performance in the prior comparative period (excluding the JobKeeper Payment subsidy (Covid-19 stimulus package),” the company stated.

The group expects to be operating in the second half of the financial year in a market where customer demand within the main sectors continues to be high. The Specialist Recruitment business is anticipated to maintain its positive trend and this will be the main contributing factor in the group achieving year on year revenue growth in the current financial year.

The On Demand IT Services business should also see an improved performance in the second half of the financial year with lockdowns easing and Covid-19 delayed projects now being restarted. The current focus of the business is the acquisition of new customers and contracts that will better align with the strengths of the Specialist Recruitment business.

Within the Talent Solution business the group has seen a very strong uplift in revenue in the first half of the financial year with the acquisition of a range of new customers and generally strong market conditions.

The company said that its focus for the second half of the financial year is:

•      Further penetration within our key customers to achieve greater cross sell opportunity across all business lines;

•      Successful onboarding of new staff and continued investment within our most profitable sectors and business lines; and

•      Taking refreshed “customer and market” strategies for its On Demand IT Services and Talent Solutions businesses to its customers supported by an increased business development capability.

Shares in Ignite closed at AUD 0.165 (USD 0.12), no change on the day and 8.33% below its 52-week high of AUD 0.18 (USD 0.13), set on 22 February 2022. The company has a market cap of AUD 14.78 million (USD 10.59 million).